Christian Ramblings

In business, the goal of a company is to create profit. Without profit a business cannot stay in business, but what happens when a company chases profit at any cost? If a company is willing to cheat, steal and defraud to make a profit, it can have devastating repercussions. Greed is an inherently destructive force and in the short term, greed can seem like a fast track to success. Greed always leaves a wake of destruction and people have gone to prison for cultivating a profit motive based on greed. Most of the time, it results in loss of business or bankruptcy. Businesses that suffer from greed experience eroding internal relationships resulting in a paralysis in innovation and effective operation because of internal degradations in efficiencies of being unable to work together.

So what is greed? The dictionary defines greed as an intense and selfish desire for something, especially wealth, power, or food. The key phrase in this definition is “selfish desire.” A selfish desire is a desire centered around one’s own point of view no matter the cost to others. When greed infects the thinking of a company, the behaviors of that company can change drastically. We know greed is rampant in business because of the extensive laws and regulations governing business relationships. We also see evidence of greed in the overburdened court system as companies sue each other. At the root of greed is lying. As an example, some insurance companies will automatically deny a claim hoping the customer will walk away knowing they can’t afford the legal cost to fight the denial. Many businesses push the boundaries of what they can get away with to increase their profit instead of walking in integrity. If a company is displaying outwardly selfish practices, then it is most assuredly a result of selfish practices from within the company.

Ethics and Morals

Part of the problem is the confusion between ethics and morals. Today, the terms ethics and morals are used as synonyms and their meanings have been incorrectly blurred. Ethics is the study of what “ought” to be. It is a normative science that defines standards or laws. Ethics is expressed in the imperative mood of language which describes an obligation. For example, a command that says you will pick up your clothes and put them away. Morals is a descriptive science describing things as they have manifested themselves. The indicative voice is used when describing a moral. For example, Jonny never picks up his clothes. When ethics and morals are assumed to be the same thing, a form of circular logic starts to manifest. Let’s say a department in a company is cutting corners and letting defects slip through to end products in order to meet a quota. Other people will begin to mimic that behavior because they see everyone else doing it assuming it is the ethic of the company. If we recognize that the ethic of the company requires defects be dealt with and not passed along, then the morals that allowed the defect to be passed on can be corrected. When the distinction between ethics and morals is blurred, a herd mentality is cultivated and it is nearly impossible to manage.

When dealing with ethics and morals, we need a clear definition of truth. Without a proper definition of truth, ethics and morals have no anchor point and we will drift aimlessly. Truth is the objective and absolute explanation of reality and there is no such thing as relative truth. If we say truth is relative, then we are blurring the line between ethics and morals. If truth can be whatever we want it to be, then that is how greed is justified in the minds of those who practice it. It is impossible to practice greed if you have ethics based on absolute truth and morals based on those ethics. One of the best indicators that the ethics and morals we live by are correct is when they are tested by reality. The tests of reality can be harsh if one ends up in prison for embezzlement. More commonly, you see “creative” accounting and verbiage in shareholder meetings where the CEO is spinning the numbers to hide the truth of what is really going on with the company.

Truth

Truth and lies are mutually exclusive concepts. Everything outside of absolute truth is a lie. When one says reality is a certain way and it turns out not to be that way, then that is a lie. Lies are the biggest fundamental problem any business faces because lies can’t be managed. Consider a situation where employees are lying about the results of their work assignments. How can a manager manage such a set of employees if he has no idea what is happening because of the lies? The only thing that can be done with a lie is reject it and apply negative consequences. No manager is going to reward an employee who lies and stand them in front of the rest of the employees and praise them for the excellent lies and then hand them a thousand dollar bonus and say keep up the lying. No good thing comes from lying. On the other hand, truth makes an organization efficient. If a manager knows the truth of what is going on with his employees, steps can be taken to remedy a problem before the costs to the company multiply. Projects within a company can be pushed forward by the force of personality of an individual when there is no justification for the project. When the warning signs are ignored, such projects can cost a company a lot of time and money. We need to examine the truth of a situation and proceed from the truth and not from a perception of truth.

Logic

One tool for detecting lies is logic. Logic acts like a fence keeping us within the boundaries of truth. Here are the fundamental laws of logic.

1) The Law of Identity - An object is identical to itself.

2) The Law of Non-Contradiction - Two contradictory statements cannot be true in the same sense at the same time.

3) The Law of the Excluded Middle - Just because two things have one thing in common does not mean they have everything in common.

4) The Law of Rational Inference - Inferences can be made from what is known to what is unknown.

If we apply logic to our business decisions, a lot of project failures can be prevented. It is amazing to see how many people know the term “logic,” but have no idea what logic is and how to apply it. After the failure of a project people will say things like, “It seemed logical to me.” They used themselves as a reference point assuming they were a solid anchor for basing their understanding of the principles of logic. This is a form of relativism where we view the world through rose colored glasses of our own making. Reality is an unyielding barrier for lies and lies only appear to be true as long as they are not exposed to reality. This is why we must test our assumptions with logic and why we must learn what logic is and how to properly use it.

If you have cancer and the doctor suggest bypass surgery for your heart, then you would question the wisdom of that doctor. In business, when things start to go south a common solution is to “reorganize” the company. So they shift things around and everyone thinks things are better for a short while as they settle into the new roles and assignments, but they quickly fall back into the old patterns of behavior. Such organizations tend to have a lot of reorganizations thinking it will solve their problems. One would think after the fifth reorganization that they would see it is not working and look elsewhere for the root cause. Just like the doctor suggesting an inappropriate procedure, companies must take a stark look at what they are doing and observe the cause and effect relationships to find the true root causes of their problems.

The Fruit of Lies

One indicator an organization is in trouble is to look at the everyday behaviors that are displayed by employees. If a recurring negative pattern is observed, then the culture of the organization is in a deteriorated state. The following list of negative behaviors are good indicators that something is askew in the culture of an organization including daily high stress, lack of caring and hope, backbiting, distraction, a high turn over rate, lack of integrity in reporting results, lack of team unity, constantly ruffled feathers and rampant office gossip. This is certainly not a complete list of symptoms that indicate a problem with the culture of a company, but it gives a flavor of the indicators that should raise the flag that something is drifting off the mark. When the culture of a company becomes toxic, people will leave when they can’t tolerate the working conditions. If the company has a high turn over rate, this is like a big red flag waving widely in the wind that the culture of the company is in trouble. Upper management will also observe that directives are not being achieved in a timely fashion or the results produced consistently don’t satisfy the original directive.

One common problem that arises in companies is empire building. When infighting rises to a certain level, empire building begins occurring which causes vertical silos of responsibility to form so people can protect their jobs and status. The result is a company begins to slowly harden and flexibility disappears. The danger is that this type of feudalism will paralyze the company from pivoting into new directions and markets because it means disrupting the status quo resulting in people desperately trying to protect their jobs thus creating internal resistance. Empire building is kind of like lubricating an engine with superglue. In response, many companies will attempt a reorganization which can provide temporary relief. Since the workers are just being moved around and the root problem is not being addressed, empire building again begins rising up from the ashes of the reorganization. Consider a product that is designed in such a way that it frustrates the end users that anyone with common sense could spot in two minutes. Before that product was released, it passed before many eyes in the company. The product was shipped because they didn’t think it was a problem or the voices in the company that pointed out the problem were ignored. Empire building shifts the priorities of a company in subtle ways that produces flawed results that external customers see right away. A blindness to the obvious is one of the fruits of lies within an organization.

Manipulation is another form of lying that often occurs. You see this more with peer relationships because the consequences of trying to manipulate a manager up the chain of command can have serious repercussions if it backfires. Instead of just making a request for resources and negotiating, people will attempt to sway opinion or outright lie to a person in order to get their goals met so they won’t look bad. Sometimes this type of manipulation goes by the term of “office politics.” If a culture of manipulation is prevalent, it leads to office gossip where people go around bad mouthing others that don’t agree with them so they can push their agenda forward. The result is bad decisions are made which can cost a lot of money, time and effort. If a manager is pushing for more resources for his team that is not warranted, then using manipulation to pull in resources automatically takes resources from those areas where they are actually needed.

Detecting the fruit of lies is crucial in recognizing whether a company has internal problems which will affect the efficiency of an organization. All of the negative attributes listed so far spring forth from lies. For example, a manager building an empire around his department thinks it’s a good thing in his own eyes since it protects his own self interest even though it has an overall detrimental effect on the company. Infighting between peer managers is justified by the lie that it is more important to win the battle than do what is best for the company as a whole. Where there is a lie, you will find inconsistency and hypocrisy. Truth has internal and external consistency which is in agreement with reality.

The Slippery Slope

Once a culture of lying takes hold in a company, it will spread and become the new normal. The ethics of the company may have not changed at the highest level, but the morals have changed on all the levels below. When that happens, the ethics of the company become empty platitudes. When people see they are disadvantaged by following the truth, truth is forsaken in order to keep up. These changes can occur gradually over time where no one notices the change. Accounting practices become sloppy or worse, creative in order to support the culture of lying. At first, a culture of lying is easy to sustain because there are few if any consequences.

A common way this manifests is in the startup of new projects where there are all sorts of optimistic projections are given of how many widgets they can sell and how fast they can bring it to market. It is called a “sure thing” by management, but in reality it is full of risks that are not being recognized. Sometimes the technology to build a product does not exist and it is assumed one can create the new technology on a preset schedule. If upper management assumes it will happen because they put it in their high level plan, then the failure to acknowledge the risk and plan contingencies is essentially lying to oneself. Such omissions of truth are difficult to detect because they are written with smooth words.

Each corporate culture develops their own set of shorthand of terminology and phrases which carries assumptive reasoning. For example, when you hear the word “synergy” it can have different meanings depending on the context in which it is used. When one company is thinking about buying another company, you will usually hear the word synergy used to describe the effect of melding the two companies together. The reality of mixing two different corporate cultures that have distinctly different sets of morals, can be a recipe for disaster. Assumptive reasoning built within our words can be misleading. Lies often fail to be detected because assumptive reasoning is the basis for what is being communicated. If the basic assumptions are wrong, it will lead to poor decisions.

Constructs That Promote Lies

Constructs within an organization are developed to solve a specific problem, but the side effects of that construction is that it may encourage a culture of lying. One such construction is stacked ranking where raises and bonuses are handed out on a basic three tiered system. The top 20% get bigger raises, the middle 70% get normal raises and the bottom 10% are given no raises and eventually fired. Since no one likes to get dismissed and everyone likes to get great raises, the motivational effect is to “game” the system. Employees will seek to protect themselves in various ways since they don’t want to end up in the bottom 10% and be fired. Stacked ranking may look good on paper as a theory, but it is detrimental to the morals of the employees and will encourage them to lie in order to boost themselves in the rankings and this is antagonistic to the efficiency of the company. The basic lie of stack ranking is people can be reduced to a statistical probability and they will perform normally when one applies arbitrary negative influences. People are living beings and will change their behavior when you apply different influences and thus create an unpredictable moving statistic. In the end, one just has to observe the effects of stacked ranking where the stress level of the employees is significantly raised. In the times where oxen were used to drive the plow, killing the oxen because it wasn’t going fast enough is like cursing the crop! A better approach is to feed and water the oxen and let it sleep so it is strengthened to plow more rows.

As companies grow in size, one has to institute certain bureaucracies for the purpose of keeping order. Sometimes such bureaucracies seem to exist for their own sake. Being trained in software development, I have observed many times where the motivation to create order in the development process ends up creating 150 page procedure manuals detailing all sorts of minutia of developing software. What ends up happening is people ignore these thick manuals and create procedures that work practically for them on a daily basis. Anything that is procedural in nature that needs to be documented should be written so that every day employees can follow it. If you can’t follow the procedure, you build into the system a construct for people to ignore it which is a subtle form of lying. All the time spent on creating the procedure is wasted, and those meant to follow it are frustrated and upper management wonders why it is not working.

Another construct that can promote lies is a manager who acts like a tyrant. A tyrant is one who rules in an oppressive way. If employees of a tyrant manager live in constant fear of reprisal, that will influence them to not make waves or tell the manager what he wants to hear and lie. As a result, problems that need to be addressed will fly under the radar. What is needed is a manager that is not afraid to hear bad news and deals with it by taking care of the problem and not taking it out on the employees. Sometimes things don’t work out as planned and employees need to be able to communicate to their manager without fear.

Companies are comprised of people. If a company builds constructs that encourages employees to lie, they are directly affecting their own efficiency. Building a company on maximizing the efficiency of the employees means conforming the constructs of order to the nature of people and not the other way around. The other end of the deal is employees need to respect the constructs set forth by management. Employees who set aside policies or directives because they don’t feel it is right are sowing the seeds of chaos. Think of a symphony orchestra that has a conductor and musicians. The conductor’s job is to direct the music and provide a framework of how and when to play the music. If all the musicians play whatever they want when they feel like it, a cacophony of dissonant melodies will be the end result. Who would buy a ticket to such a concert?

Accountability

People left to their own devices will usually take the path of least resistance and a culture of lies is the fruit of following that path where selfishness for one’s own comfort becomes the guiding principle. Accountability is the tool to keep in check deteriorating morals. In the example of stacked ranking where people are prejudged that 10% must fall into the bottom, it produces animosity. Accountability is different in that it judges the actual results and applies appropriate rewards and correction. When an employee is disciplined for an arbitrary reason, it will breed discontent and eventually such an employee will leave the company thus adding to the turn over rate. When an employee needs correction, applying it with the purpose of redeeming their behavior results in an employee becoming a trusted individual. For instance, consider an employee who lacks the social graces to effectively argue a point and always ends up unjustly offending people. One has two choices, let animosity build against that employee which will eventually lead to their departure or take the employee aside and retrain them to properly handle the offensive situation. If that employee accepts the correction and retraining, you end up with an employee that can be trusted and becomes productive.

Cultural inertia within a company is the result of people becoming settled in the way things are done. If the culture is in good shape, it can be a good thing because it provides resistance to adopting destructive practices. If the culture has lies as its foundation, you will find a lack of effective accountability. Trying to change the culture without effective accountability is a difficult task at best. When effective accountability is introduced to a culture of lies, it will be like dragging finger nails across a chalk board and you will have to stick with it until the behaviors change.

Conclusion

Building a business on truth and integrity is a really simple concept, just choose to stop lying. Telling the truth or lying is a choice we all make on a daily basis. Infusing the will to make the choice to stop lying across an organization can be difficult and usually requires significant effort until the employee base understands and practices being forthright. If your company has constructs in place that influences the employees to lie, remove them. If there are management styles that cause employees to shy away from telling management bad news, change the communication paradigm. Don’t just reward people for outstanding performance, but also for integrity in revealing problems within the business. Make it easy for people to walk in integrity by removing excessively complicated procedures with ones people can actually follow in their daily work. Also, one can’t avoid applying negative consequences for lying or manipulation because some people will always push the limit to see how far they can go.

Most people want to walk in truth and integrity, but they simply don’t know how. Train them to recognize lies through logic and how to deal with them. If an employee is prone to lying, mentor them in the way of walking in truth. If such an employee changes his ways, he is more valuable because you now know they can be trusted.

Once an organization is properly walking in integrity, diligence is needed to maintain the ethical standards. If the words of management on integrity become hollow, the employees will become complacent and gravitate towards promoting their self interests over the interests of the company. In the end, a culture of lying will affect the bottom line in significant but subtle ways. An organization that practices walking in truth will maximize profits. Walking in integrity requires no explanation, but walking in a lie brings about shame when found out.